See quotes attributed to Hartwig below – that price optimization is OK. It is either OK or it is not. Which is it? Charging more for something without adding value (dishonest scales)is an ancient prohibited concept.
Robert Hartwig heads the Insurance Information Institute, the trade group we were referred to by Nationwide and Allstate. He says the industry has always tried to estimate how much customers are willing to pay.
And Hartwig says he thinks price optimization is OK because it’s related to legitimate financial objectives — like making a profit.
Because Price Optimization is (rightly or wrongly) called ‘Price Gouging’ in the article, then I must claim that my state legislature has been practicing ‘Tax Optimization’ in recent decades.
I get the “tongue in cheek” comment. But seriously, a dishonest scale is dishonestly putting your thumb on the scale to increase the weight. Insurance is priced by the amount of risk assumed, and is, by analogy, “the weight” and when multiplied by the price per unit, results in the amount charged. Since this is regulated, the price per unit and calculation is filed.
Charging more to certain customers without filing the change, when there has been no increase in “weight” or risk, is tantamount to the dishonest practice of a “thumb on the scale.”
I don’t see how Hartley can suggest this is OK; and particularly galling is that it is justified in the pursuit of profit. So, Mr. Hartley, there are legal ways to make a profit and there are dishonest (illegal) ways to make a profit.
When customers are undercharged – without filing the change – for competitive pursuit of accounts – is that also not price gouging – in reverse?
What then is the purpose of different rate level structure filings (e.g. standard, preferred, sub-standard) for different companies with an insurance group? Yes, they are filed. But the decision as to which company’s paper to write them on is made without use of a formal filing. How structured and well-documented are those classification decisions?
Everybody here is freaking out because this only happens when you have a lazy agent who doesn’t do their due diligence, or when you have a person who doesn’t every shop around. All these lazy, incompetent agents, circle-jerking about their boats, because they were handed a position from a family member,in an noncompetitive area freak out when they actually have to do something.
BTW, going against this is advocating for government intervention in free markets, and calling for regulation. So shut the fuck up when it happens elsewhere. Price discrimination is a sign of a perfectly competitive market, because each individual or firm pays exactly how much they value a service. Of course it’s easy for you guys to post about Obama and cry than to learn even a little actual economics.
See quotes attributed to Hartwig below – that price optimization is OK. It is either OK or it is not. Which is it? Charging more for something without adding value (dishonest scales)is an ancient prohibited concept.
http://www.npr.org/2015/05/08/403598235/being-a-loyal-auto-insurance-customer-can-cost-you
Robert Hartwig heads the Insurance Information Institute, the trade group we were referred to by Nationwide and Allstate. He says the industry has always tried to estimate how much customers are willing to pay.
And Hartwig says he thinks price optimization is OK because it’s related to legitimate financial objectives — like making a profit.
Because Price Optimization is (rightly or wrongly) called ‘Price Gouging’ in the article, then I must claim that my state legislature has been practicing ‘Tax Optimization’ in recent decades.
Yogi, our Federal Government has been gouging the American People with high taxation, regulation and bad governance my whole adult life.
I do not dispute your claim. I was merely observing the upward trend of gouging…. over my and my predecessor’s lives.
all your adult life? even when there was a Republican President and a Republican majority in the House and Senate? hmmm…
I get the “tongue in cheek” comment. But seriously, a dishonest scale is dishonestly putting your thumb on the scale to increase the weight. Insurance is priced by the amount of risk assumed, and is, by analogy, “the weight” and when multiplied by the price per unit, results in the amount charged. Since this is regulated, the price per unit and calculation is filed.
Charging more to certain customers without filing the change, when there has been no increase in “weight” or risk, is tantamount to the dishonest practice of a “thumb on the scale.”
I don’t see how Hartley can suggest this is OK; and particularly galling is that it is justified in the pursuit of profit. So, Mr. Hartley, there are legal ways to make a profit and there are dishonest (illegal) ways to make a profit.
When customers are undercharged – without filing the change – for competitive pursuit of accounts – is that also not price gouging – in reverse?
What then is the purpose of different rate level structure filings (e.g. standard, preferred, sub-standard) for different companies with an insurance group? Yes, they are filed. But the decision as to which company’s paper to write them on is made without use of a formal filing. How structured and well-documented are those classification decisions?
It’s Mr. Hartwig.
Everybody here is freaking out because this only happens when you have a lazy agent who doesn’t do their due diligence, or when you have a person who doesn’t every shop around. All these lazy, incompetent agents, circle-jerking about their boats, because they were handed a position from a family member,in an noncompetitive area freak out when they actually have to do something.
BTW, going against this is advocating for government intervention in free markets, and calling for regulation. So shut the fuck up when it happens elsewhere. Price discrimination is a sign of a perfectly competitive market, because each individual or firm pays exactly how much they value a service. Of course it’s easy for you guys to post about Obama and cry than to learn even a little actual economics.
Amen UW! I’m for “claims optimization” as well. If the insured isn’t smart enough to ask, then don’t pay.
Shut your ugly mouth UW. Go to a different forum if you want to curse. You are an idiot with a capitol I.
we live in a free country, agent. UW can swear if he wants to. who made you the insurance journal comment police anyway?
You have been reported to IJ dude. We will let them deal with you. You must be one sad individual.